At a time in our country where we all have to tighten our belts in the wake of economic downgrades by two rating agencies, attracting foreign investment is crucial. It is therefore refreshing to hear that in the Western Cape investor confidence has grown over the last five years, and Cape Town is the second biggest contributor to the National GDP according to the latest State of the Central City Report by the Central City Improvement District (CCID).
“In the real estate market we have heard various negative predictions from time to time but we remain realistically optimistic as instructions received from government departments, private sellers, institutions, funds and the legal fraternity have doubled in the last three months,” said Jonathan Smiedt, ClareMart Auction Group CEO.
Historically, selling one’s property by way of auction, was linked to distress, last resort, insolvency or court instruction. This trend is definitely being arrested year on year, with more sellers of commercial and residential property choosing the auction floor over traditional real estate channels, and here is why:
- The auctioneer is simply quicker at getting them an offer, than going the traditional estate agent route, which could easily take six to 12 weeks.
- This is the only mechanism that allows the seller to sell voetstoots in terms of the Consumer Protection Act.
- Having a database of qualified cash buyers, means the auctioneer does not take suspensive offers (subject to selling another property). Those are merely options, not concrete offers.
- The process is transparent and the bidder knows exactly what the competing offers are – information which is often questionably manipulated by estate agents trying to extract higher offers.
- The auction floor draws between 10 000 and 15 000 investors every year.
- The bid price is the net price to the seller – no commission, no hidden costs.
“The Estate Agent has, by all accounts, not been able to match the fast pace and marketing target methods that establish finality with the auction process. Their procedures have simply not been fine-tuned over the years, to the quick pace of an auction. As role players in the real estate sector, we should collectively work toward educating the market about their options, enabling them to make informed decisions based on their specific property needs and circumstances.” concluded Smiedt.